A San Francisco nonprofit group that touts its ties to Secretary of State Kevin Shelley, Assemblyman Leland Yee and other well-known politicians made thousands of dollars in illegal campaign donations during the past three years, state and local records show.

Campaign finance reports show that America Education Foundation International, a corporate-funded charity set up to help low-income schools and students, made $3,665 in banned political donations from November 2001 to September 2004.

Federal tax rules bar tax-exempt charities, also known as 501(c)3 organizations, from endorsing candidates for public office or trying to help them get elected.

"The IRS rules are pretty clear," said Tom Dresslar, a spokesman for Attorney General Bill Lockyer, who helps oversee California charities. "It is a definite no-no for a public benefit corporation to contribute money to political campaigns."

But Yeung denied the group did anything improper. Yeung said the nonprofit's employees, including herself, were allowed to spend up to $1,000 for each of the nonprofit's projects on whatever causes they wished, whether it was equipment for a school or a donation to a political campaign.

"Our organization is very clean," said Yeung, who refers to herself as the "Honorable Lady of San Francisco."At a recent fund-raising banquet in San Francisco, the nonprofit group handed out glossy brochures stuffed with more than half a dozen letters of support from politicians, including former President Bill Clinton; Rep. Nancy Pelosi, D-San Francisco; Sen. Barbara Boxer, D-Calif.; Lt. Gov. Cruz Bustamante and San Francisco Mayor Gavin Newsom. The dinner focused on the group's plans to create a leadership training program and other programs to help revitalize the Bayview-Hunters Point area.

The program booklet also identified Shelley, Yee and Brown as members of the group's "honorary advisory council," and included a certificate from Shelley praising Yeung for her work with the nonprofit. The foundation's Web site also features the politicians' names and pictures prominently, calling them active board members.

A Shelley spokeswoman confirmed that Shelley knows Yeung and may have assisted the nonprofit organization during its infancy, but said the Democrat hadn't been involved with the nonprofit in years and never joined the advisory council.

"Anyone confronted with this situation would be speechless to put it mildly," said Sam Singer, another Shelley spokesman.

State records show that Shelley's campaign did not receive any contributions from the foundation directly, but received $900 from a silk floral business that Yeung used to run, and which used the same address as the nonprofit.

Yee, meanwhile, said his only connection to the group was attending a ribbon-cutting event several years ago, when he was a member of the San Francisco Board of Supervisors. The San Francisco Democrat also said he refused to write a letter supporting the nonprofit organization's recent dinner because he didn't know enough about the event.

"It is a little bit frustrating to see they went ahead and used my name anyway," Yee said.

Brown, whose state Senate campaign fund received $500 from the group, did not return calls seeking comment.

Yeung said all three politicians helped launch the group four years ago, but acknowledged they never attended any board meetings. Still, she said, the other board members continued to use the officials' names as a sign of respect.

"If my father died, I would still keep his picture out because I loved him," Yeung said.

Bonilla, a board member who received $500 from the nonprofit for his run for San Francisco supervisor, did not return e-mail seeking comment. Dr. John Howse, the chairman of the nonprofit group's board and a San Francisco anesthesiologist, did not return phone calls.

Yeung said the nonprofit's board did not review the donations because each was less than $1,000 and did not require approval.

IRS spokesman Jesse Weller said charities could potentially lose their tax-exempt status for violating the political ban.

"It's a serious violation," said Greg Colvin, of Silk, Adler & Colvin, a San Francisco law firm that specializes in nonprofit law. Colvin, however, said it's more common for the IRS to fine a charity for a first offense.

The foundation also has other problems. The state Franchise Tax Board suspended the group's corporate charter in February because it failed to file a tax return with the state. The foundation also doesn't appear to have filed any tax returns with the IRS, according to two Web sites that post the forms on the Internet. Without returns, it is difficult to say how much money the nonprofit raised or where the money went.

Yeung said the group relies largely on funding from companies, such as Wells Fargo and Oracle.

"The government never gave us one penny, and we got upset," she said. "We don't want to ask anymore."

Questionable campaign contributions

Charities are barred under federal tax rules from making partisan campaign donations. But records show the America Education Foundation International made nine such donations: